John Bolton attends a meeting at the White House on 17 July.
Photograph: Andrew Harnik/AP

Donald Trump plans to make Iran pay a price few countries have ever paid before, according to the US national security adviser, John Bolton, who doubled down on a late-night tweet in which the US president threatened Tehran.

Trump says Iran will 'suffer consequences' after speech by President Rouhani

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Bolton’s statement was designed to show that Trump’s unexpectedly belligerent tweet was not a random act, or empty bluster but part of a considered move by the US administration to step up the economic, political and psychological pressure on Iran.

Iran dismissed the US president’s threats as psychological warfare designed to appeal to his electoral base ahead of the midterm elections.

But Bolton, a well-known hawk on Iran, told reporters in Washington: “I spoke to the president over the last several days, and President Trump told me that if Iran does anything at all to the negative, they will pay a price few countries have ever paid.”

The hostile rhetoric between Washington and Tehran escalated after the Iranian president, Hassan Rouhani, told the US that it shouldn’t “play with the lion’s tail”.

Late on Sunday, Trump posted a tweet in capital letters warning Rouhani of “unprecedented consequences”.

Donald J. Trump (@realDonaldTrump)

To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!

His attack sent the Iranian national currency into a tailspin when trading opened on Monday, exacerbating months-old fluctuations that have prompted protests in Tehran’s Grand Bazaar.

The rial, which has been rapidly depreciating against the dollar after Trump pulled the US out of the nuclear deal in May, hit a fresh all-time low. On Monday, $1 bought 92,000 rials on the black market, though many exchange bureaux had stopped trading.

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The Iranian foreign minister, Mohammad Javad Zarif responded with a scathing tweet of his own, mimicking Trump’s caps-lock message and warning the US president to “BE CAUTIOUS!”

Javad Zarif (@JZarif)

COLOR US UNIMPRESSED: The world heard even harsher bluster a few months ago. And Iranians have heard them —albeit more civilized ones—for 40 yrs. We’ve been around for millennia & seen fall of empires, incl our own, which lasted more than the life of some countries. BE CAUTIOUS!

Trump’s tone was also criticised in Europe which is already in sharp disagreement with the US president over his decision to pull out of the 2015 nuclear deal.

European leaders says there is no evidence that Iran is in breach of the deal, but they are struggling to find credible ways to protect businesses still trading in Iran from the threatened effect of US secondary sanctions. The first banking sanctions are due to come into force in three weeks.

Some European diplomats said Trump’s attacks were only reducing the chances of reform inside Iran, including the hopes of persuading Iran to change its behaviour in countries such as Syria, Yemen and Iraq.

The emir of Qatar, Tamim bin Hamad Al Thani, due to meet May in Downing Street on Monday, has warned that US sanctions could provoke Iran into closing the Strait of Hormuz – cutting off European access to Middle East energy supplies.

Roughly 20% of the UK’s liquid natural gas comes from Qatar.

In the speech on Sunday that triggered Trump’s bellicose late-night tweet, Rouhani said: “Mr Trump! We are the honest men who throughout history guaranteed the safety of the nation’s waterways. Do not play with the lion’s tail – it will bring regret.”

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Iran’s state-run news agency Irna said Rouhani’s message was merely a repetition of what Zarif had said in the past: “Never threaten an Iranian.”

The head of the country’s voluntary basij paramilitary force, Gholamhossein Gharibpour, more forcefully rejected the US president’s rhetoric. “What Trump is saying against Iran is merely psychological warfare. He wouldn’t dare to make the mistake of taking any actions against Iran,” he said.

According to the semi-official Isna news agency, he said: “We will not give up on our revolutionary values and beliefs and we will stand against imperialists and tyrants, and those few who have fallen for this psychological warfare of this crazy president should know that he wishes the destruction of all of us. Our people and our armed forces will stand up to enemies and will not yield.”

Foaz Izadi, a prominent Iranian commentator close to the establishment, accused Trump of attempting to distract attention from domestic pressures in the US.

“This is designed to address his base in the US. You need to remember that he is facing elections in November, and if Democrats gain power in the US Congress, they will impeach him,” Izadi told the Guardian.

Izadi said Iranian officials are concerned about Trump, however. “The rhetoric is negative and increasing on both sides, and people inside Iran are worried.”

Tehran’s foreign ministry spokesman, Bahram Qassemi, also condemned an intervention at the weekend by Mike Pompeo, the US secretary of state, who called Iran’s ruling elite a “mafia” during a speech on Sunday.

“These remarks are a clear example of the country’s interference in Iran’s internal affairs and exactly in line with its long-term destabilising and destructive policies in the region,” he added, saying that Pompeo’s intervention would encourage solidarity among people inside Iran.

On Twitter, many Iranians used #StopMeddlingInIran to voice their opposition to Trump and Pompeo.

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The Trump administration is seen in Iran as particularly close to a fringe, cult-like Iranian opposition group, the Mujahedin-e-Khalq (MeK), which is bent on regime change and has no visible support inside the country.

Jamal Abdi from the National Iranian American Council (NIAC) said: “Clearly, Pompeo is hoping to elevate voices who would set the US and Iran on a collision course to conflict over the majority in the Iranian-American community who have been shocked and dismayed by this administration’s disastrous approach.”